Buying a house is always a big decision, and buying a strata title is no different.
In fact, because properties like units and villas are part of a strata plan, they come with their own set of unique considerations to take on before buying the property and proceeding to settlement.
Here are three important things to consider when buying a strata title:
1. Is it my property, or common property?
The parts of the strata plan which belong to the strata company (in which each lot owner is a shareholder) are common property. Find out what’s part of your property, and what’s common property, because this will affect how you use it! Ask your real estate agent whether things like:
- The garden,
- The carport,
- The driveway, and
- The courtyard
are common property, before you commit to buy!
2. How much are the strata levies?
Every owner of a strata title will have to pay a regular strata levy to the strata company for:
- Regular upkeep of common property,
- Taxes and other expenses, and
- Occasional costs, such as roof repairs.
Strata levies vary between strata plans, so find out from your real estate agent how much the regular levy is – you’ll want to consider this in your quarterly budget.
In addition, every now and then a strata company will raise a one-off special levy to undertake a large maintenance job such as painting the exterior of all units, or replacing the driveway – these can be upwards of $1000. You could be required to contribute to this levy at settlement, so ensure you ask if there’s one raised when you make an offer.
3. What are the by-laws?
Strata companies have their own set of rules, or by-laws, created by the company. They govern all lot owners, and affect things like:
- The appearance of units,
- Damage of common property,
- Obstruction of common property,
- Garbage disposal,
- Cars and parking, and
Clearly, these will affect your (or your tenants’) daily life in the property, so find out what these by-laws are before committing to buy the property!
These are just three things to consider when buying a strata title – see Landgate’s website for more information on strata titles.
Update: Since writing this article I’ve received the following advice from a reader, Andrew: “After buying into and then leaving a nightmare of a strata, I would encourage you to include in your advice to review the last three years of Strata Records. This will allow you to find out of any pending legal actions, disputes, possible large maintenance items on the horizon and you will get a good sense if the other Strata Owners are the type of people you want to do business with.”
Image by Richard Taylor via Flickr.